Tuesday 17 September 2019 12:38 pm

HS2 officially signs £1bn Old Oak Common contract with Balfour Beatty group

High Speed Two (HS2) has formally signed a £1bn contract for Old Oak Common station despite an ongoing review which could see the entire scheme scrapped.

A Balfour Beatty, Vinci and Systra joint venture will now go ahead and build the station, which HS2 says will create 65,000 jobs and 25,500 new homes in west London.

Read more: HS2 faces seven-year delay as costs set to balloon to £88bn

HS2 said its agreement with Balfour Beatty included “sufficient flexibility to ensure that the outputs of the ongoing Oakervee review can be accommodated”.

HS2 Ltd Chief Executive, Mark Thurston said: “Old Oak Common is one of the most important elements of the project – a landmark station that will be at the heart of the UK’s biggest regeneration project, helping to unlock tens of thousands of jobs and new homes.”

HS2, which will link London to the north in stages, is currently subject to a review led by its former chairman Douglas Oakervee and arch critic Lord Berkeley.

Earlier this month a report carried out by HS2 chair Allan Cook found that is was unlikely the scheme could be delivered within its original official budget of £56bn – a price tag that has been questioned for years.

Shapps later admitted to MPs that based on 2019 prices, the project could cost £88bn.

The first phase of HS2, which will link London to Birmingham, is also running between two and five years behind schedule, while the second phase linking Birmingham to Manchester and Leeds could be delayed by up to seven years.

The Oakervee review is due to finish in the autumn.

Read more: Heidi Alexander: It would add ‘insult to injury’ if HS2 skips Euston

Earlier in the year rival bidder Bechtel challenged HS2’s handling of the contract procurement process for Old Oak Common station, which resulted in an automatic suspension order that prevented HS2 from signing the contract with Balfour Beatty.

HS2 had applied to lift the suspension order, but that was also challenged by Bechtel. However, last month, the American engineering giant withdrew its challenge against the order, allowing the contract signing to go ahead.